Having seen a large number of people grappling with outstanding debt, you can look upon it as a threat to your financial condition, but the fact is that debt is a threat when you take on more than your affordability. There are miscellaneous events in life when you ought to borrow money, such as purchasing a car or house.
Nevertheless, occasionally you ought to borrow money to tide over during financial emergencies. Money borrowed during financial emergencies is known as urgent loans in Ireland. These small loans work absolutely different from long-term loans. They are paid off in a lump sum. The repayment term of these loans does not extend for more than a month, which means you have to settle the whole of your debt on the due date.
Small loans are challenging to pay off, although they seem to be manageable. Some people think that they can get rid of the loan immediately after paying it back, but they often end up running out of money and eventually roll over the loan. This adds up the debt amount, and you fall into an endless spiral of debt in the end.
The Easiest method to make the best of urgent loans
If you do not want to rue the day, you should carefully assess whether now is the right time to borrow money or not. Here are the simplest ways that you can use to make the best of urgent loans:
Compare interest rates
Most of the time, you do not get away to compare interest rates, especially when you have to borrow money during financial emergencies. You do not acquire sufficient period to do so because you cannot wait any longer.
For instance, if you need to repair your laptop as your office work is being hindered, you will quickly apply for a loan. Since you cannot put off the repair work, you will not be able to compare interest rates.
Note that each lender offers different interest rates on these loans. You must select the one that lends you funds at the lowest achievable interest rates.
Of course, you will not be able to make the comparison when you need money to fund your emergency needs, but you should do this homework beforehand. If you have already researched the interest rates, you will choose a better loan deal.
Identify your needs
Just because you feel that you should borrow money to fund your needs does not mean that you should rush to your direct lenders. Before you jump to fill in the online application form, you should figure out if it is urgent to borrow money.
For instance, if you need to buy some medicines and your savings have fallen short, you will have to borrow money immediately. You cannot avoid borrowing. However, most of the time, people borrow money even though it is not urgent.
Impulsive buying behavior can be the cause too. Therefore, you are suggested to think twice before you borrow money. If you can put off the purchase, you should, and by outing it off, you will be able to pay for it on your own.
This can prevent you from paying interest on the money borrowed. Note that these small loans have been designed to help you meet unforeseen expenses, not your regular needs. If you are looking to fund your regular expenses, you should drop the idea of borrowing money.
Look at the fees
You can find several lenders advertise on their websites that they do not charge any upfront fees, but the fact is that they charge fees, and it is usually hidden. You can get to know about it at the time of reading the terms and conditions in the contract.
Do not forget to evaluate the fees charged by the lender. Do not fight shy of asking for it straightaway. Fees vary by lender, so make sure that you already know how much a lender will likely charge.
If you have a poor credit rating, you will apply for a bad credit loan. This becomes more crucial to evaluate fees and interest rates at the time of applying for these loans.
Plan your repayments
Since urgent loans are small loans, you can find it foolish and impossible to plan your repayment. Repayments are often planned for those loans that require you to pay down over an extended period. Here planning your repayments means ensuring your repaying capacity.
For instance, if you need €100, you can think you can easily repay it, but you do not realise that you are to pay €15 (for example) as interest on top of €100. Further, this money will be paid out of your income. If you were not able to take out €100 to meet your expenditure, how would you be able to pay €115?
Of course, this will throw you in a deep end. This is why it is recommended to assure your repaying capability when borrowing money. If you suspect your affordability, you should drop the idea of borrowing money. Use online loan calculators to estimate how much it will cost you.
Though it cannot estimate the exact amount, you will at least have an idea. In reality, the actual cost will be more than the estimated amount given by the calculator because of varying interest rates and processing fees.
The bottom line
If you want to make the best of urgent loans, you should analyse your needs. Make sure that you do not borrow money more than your affordability. Compare interest rates and ask lenders about processing fees. It is crucial to research so you choose an affordable deal.
Make sure that you do not borrow money unless you need it urgently. If you do not keep these points in your mind, you will never be able to manage your debt sensibly, and it will become more complicated for you to handle debt, and in the end, you will fall into a debt trap.